Do industrial incidents in the chemical sector create equity market contagion?

IntroductionThis paper examines a number of US chemical industry incidents and their effect on equity prices of the incident company. Furthermore, this paper then examines the contagion effect of this incident on direct competitors.MethodEvent study methodology is used to assess the impact of chemical incidents on both incident and competitor companies.ResultsThis paper finds that the incident company experiences deeper negative abnormal returns as the number of injuries and fatalities as a result of the incident increases. The equity value of the competitor companies suffer substantial losses stemming from contagion effects when disasters that occur cause ten or more injuries and fatalities, but benefit from the incident through increasing equity value when the level of injury and fatality is minor.ConclusionsPresence of contagion suggests collective action may reduce value destruction brought about by safety incidents that result in significant injury or loss of life.Practical ApplicationsThis research can be used as a resource to promote and justify the cost of safety mechanisms within the chemical industry, as incidents have been shown to negatively affect the equity value of the not just the incident company, but also their direct competitors.     

Harnessing database resources for understanding the profile of chemical process industry incidents

Analyzing historical databases can provide valuable information on the incident occurrences and their consequences for assessing the safety of the chemical process industry. In this study, the RMP and HSEES databases were utilized to understand the patterns and the factors influencing chemical process industry incidents. Frequency exceedance curves were generated by utilizing the different incident consequences from the databases to understand the profile of societal loss from reported incidents. Understanding the statistics and trends of the historical incidents could serve as important lagging indicators in order to assess the probable proximity to major consequences from the low-probability/high-consequence incidents. To this regard, the safety pyramids were also generated to better understand the relationship between the different consequences of the reported incidents. Furthermore, the safety pyramids were analyzed in comparison with the traditional safety pyramid proposed by Heinrich to understand the US process industry incident occurrence trends.     

Factors contributing to US chemical plant process safety incidents from 2010 to 2020

Process safety incidents can result in injuries, fatalities, environmental impacts, facility damage, downtime & lost production, as well as impacts on a company's and industry's reputation. This study is focused on an analysis of the most commonly reported contributing factors to process safety incidents in the US chemical manufacturing industry. The database for the study contained 79 incidents from 2010 to 2019, partly investigated by the Chemical Safety Board (CSB). To be included in the study, the CSB archive of incident investigations were parsed to include only incidents which occurred at a company classified as 325 in the North American Industry Classification System (NAICS), assigned to businesses that participate in chemical manufacturing. For each incident, all of the identified contributing factors were catalogued in the database. From this list of identified contributing factors, it was possible to name the ‘top three’ contributing factors. The top three contributing factors cited for the chemical manufacturing industry were found to be: design; preventive maintenance; and safeguards, controls & layers of protection. The relationship between these top contributing factors and the most common OSHA citations was investigated as well. The investigation and citation history for NAICS 325 companies in the Occupational Safety & Health Administration (OSHA) citations database was then analysed to assess whether there was any overlap between the top reported contributing factors to process safety events and the top OSHA citations recorded for the industry. A database consisting of the inspection and citation history for the chemical manufacturing industry identified by NAICS code 325 was assembled for inspections occurring between 2010 and 2020 (August). The analysis of the citation history for the chemical manufacturing industry specifically, identified that the list of the top contributing factors to process safety incidents overlapped with the most common OSHA violations. This finding is relevant to industry stakeholders who are considering how to strategically invest resources for achieving maximum benefit – reducing process safety risk and simultaneously improving OSHA citation history.     

Equipment failures and their contribution to industrial incidents and accidents in the manufacturing industry

Accidental events in manufacturing industries can be caused by many factors, including work methods, lack of training, equipment design, maintenance and reliability. This study is aimed at determining the contribution of failures of commonly used industrial equipment, such as machines, tools and material handling equipment, to the chain of causality of industrial accidents and incidents. Based on a case study which aimed at the analysis of an existing pulp and paper company's accident database, this paper examines the number, type and gravity of the failures involved in these events and their causes. Results from this study show that equipment failures had a major effect on the number and severity of accidents accounted for in the database: 272 out of 773 accidental events were related to equipment failure, where 13 of them had direct human consequences. Failures that contributed directly or indirectly to these events are analyzed.     

Motor vehicle towing: An analysis of injuries in a high-risk yet understudied industry

Objectives: National fatality rates for commercial tow truck operators exceed those of other first responders who also perform traffic incident management services. The objectives of the current study are to (1) characterize causal factors associated with injuries among commercial tow truck operators engaged in roadside assistance through analysis of coded and free text data obtained from U.S. Occupational Safety and Health Administration (OSHA) investigation files, and (2) utilize supplemental data sources to analyze environmental factors for injuries in which commercial tow truck operators were struck by roadway traffic. Methods: Searches of OSHA’s online IMIS database were performed to identify investigations of incidents in which tow truck operators were injured while performing roadside assistance duties. Freedom of Information Act (FOIA) requests were submitted to obtain full investigation files for each case. Coded and narrative text analyses were performed to identify causal themes across the identified cases. Results: One-hundred and six cases of tow truck operators being killed or severely injured were identified in IMIS; 41 FOIA requests for related investigation documents were fulfilled. Two major event type themes were identified which accounted for 9 in 10 of the cases identified. These were (1) ‘struck-by’ incidents, which were primarily injuries resulting from contact with roadway traffic, rolling vehicles and equipment or other non-motorized objects; and (2) ‘caught-in or -between’ incidents, which were primarily injuries resulting from being pinned beneath and between vehicles and being caught in moving parts. Conclusions: The towing industry should provide initial and refresher safety training on vehicle loading and unloading, defensive techniques when exposed to traffic on roadways, and proper wheel chocking and braking procedures. States should include tow trucks as a first responder vehicle type in their “Move Over” laws and implement public awareness campaigns to protect all first responders, including tow truck operators.     

基于事件提取和改进MMHC的航空旅客运输事故征候贝叶斯网络建模*

为表征航空旅客运输事故征候演化机理,提出事故征候贝叶斯网络的建模方法。基于事故征候中致因事件、结果事件及分类标准的定义,以7 265起事故征候案例为样本,利用事件提取算法,识别事故征候叙述文本中的致因事件,利用改进的最大最小爬山算法实现网络建模;依据事件提取的测试集验证与结构学习的交叉验证,检验建模算法的准确性与有效性;基于证据敏感性指标,识别关键致因事件。结果表明:航空旅客运输事故征候贝叶斯网络模型包含94个节点和247条有向弧。空降冲突、严重设备故障、机组成员疾病及火灾烟雾是模型中高风险关联的致因事件,在安全监管过程中消除或减弱关键致因事件的发生能有效控制系统风险。     

Trends in chemical hazards in Japan

In the past, the chemical industry in Japan has been the cause of a number of major industrial accidents. Subsequent to each accident, specific lessons have been learned. These lessons learned have been implemented in terms of safety education of the employees and/or safety measures of the equipment and facilities resulting in a rapid decrease of corresponding accident frequencies. In this paper, we summarized both recent and past major accidents caused by chemical substances in fixed installations in Japan. Case studies show that runaway reactions are among the main causes of major accident occurrences in the chemical process industry in Japan. A recent fatal poisoning accident caused by H₂S gas generated during maintenance work again highlights the necessity of adequate safety management in a chemical factory. Therefore, even if hazard evaluation of chemical substances and chemical processes is necessary to prevent runaway reactions, human error is also an important factor contributing to reaction hazards [Wakakura, M. (1997) Human factor in chemical accidents, J. Safety Eng. High Press. Gas. Safety Inst. Japan, 34, 846].     

Trends in accidents,disasters and risk sources in Europe

Most of the adverse impacts on man and/or the environment result from routine human activities such as the process industry, electricity generation and use, transport and agriculture (hazards, i.e. sources of risk). Apart from such essentially technological hazards, possibly resulting in “accidents”, human health and the environment can also be affected by natural hazards, possibly resulting in “disasters”, such as earthquakes or floods. This paper examines current trends in the risk sources and occurrences of four classes of such types of undesired events, entailing largely involuntary risk (e.g. neither car-driving nor smoking):

• •major accidents at fixed installations in the process industry,
• •incidents/accidents at nuclear installations,
• •marine transport and offshore installation accidents,
• •disasters caused by natural hazards and their potential exacerbation by human activities.

It aims to provide an integrated overview of such events in Europe (≡ 15 EU Member States, 4 EFTA, 13 PHARE, 7 TACIS and 5 other South and South Eastern European countries) during the last decade, estimating and interpreting trends in the number of risk sources and accidental events. For each type of event, specific “accident” definitions are given, illustrating the differences in the perception of the respective risk.     

Comparison of techniques for accident scenario analysis in hazardous systems

In this paper, three accident scenario analysis techniques are presented and compared regarding their efficiency vs. the demanded resources. The complexity of modern industrial systems has prompted the development of accident analysis techniques that should thoroughly investigate accidents. The idea of criteria classification to fulfill this requirement has been proposed by other researchers and is examined here too. The comparison is done through the application of Event Tree analysis, Fault Tree analysis and Petri Nets technique—two relatively simple and a more demanding methodology—on the same hazardous chemical facility in view of analyzing an accident scenario of a hazardous transfer procedure. Accident scenario analysis techniques are essential not only in learning lessons from unfortunate events in the chemical industry but also in preventing the occurrence of such events in the future and in communicating risk more efficiently.     

Lagging or leading? Exploring the temporal relationship among lagging indicators in mining establishments 2006–2017

Problem: Safety management literature generally categorizes key performance indicators (KPIs) as either leading or lagging. Traditional lagging indicators are measures related to negative safety incidents, such as injuries, while leading indicators are used to predict (and therefore can be used to prevent) the likelihood of future negative safety incidents. Recent theory suggests that traditional lagging indicators also possess characteristics of leading indicators, and vice versa, however empirical evidence is limited. Method: The current research investigated the temporal relationships among establishment-level injuries, near misses, and fatal events using injury and employment data from a sample of 24,910 mining establishments over a 12-year period. Results: While controlling for employee hours worked, establishment-level reported injuries and near misses were associated with of future fatal events across the sample of mines and over the time period studied. Fatal events were also associated with increases in future reported near misses, providing evidence of a cyclic relationship between them. Discussion: These findings challenge the strict categorization of injuries, near misses, and fatal events as lagging indicators. Practical applications: Understanding the KPIs that should be used to manage organizational safety, and how they can be used, is of critical practical importance. The results of the current study suggest that, depending on several considerations, metrics tied to negative safety incidents may be used to anticipate, and possibly prevent, future negative safety events.     

Chemical process route selection based upon the potential toxic impact on the aquatic,terrestrial and atmospheric environments

This paper proposes a method to estimate the inherent environmental friendliness of a chemical process plant by considering the potential toxicity impact on the aquatic, terrestrial and atmospheric environments. A worst-case scenario of a total loss of containment in the plant is assumed. The method proposed by [Gunasekera, M.Y., Edwards, D.W. (2003). Estimating the environmental impact of catastrophic chemical releases to the atomosphere: an index method for ranking alternative chemical process routes. Trans. IChemE., Part B, Process Safety and Environmental Protection, 81(B6), 463–474] for determining the inherent atmospheric environmental friendliness of a chemical plant is combined with the method proposed by [Cave, S.R., Edwards, D.W. (1997). Chemical process route selection based on assessment of inherent environmental hazard. Computers Chem. Engng., 21, S965–S970], which estimates the inherent friendliness to the aquatic and terrestrial environments.Application of this method to six routes to produce methyl methacrylate shows that the acetone cyanohydrin based route is potentially the least inherently environmentally friendly. The highest potential hazard is observed in the aquatic environment due to the chemicals associated with the acetone cyanohydrin route.     

我国化工企业火灾爆炸事故统计分析及事故表征物探讨

从事故统计分析的角度,对2001—2006年我国化工企业发生事故的设备、事故介质进行分析;对设备发生事故的规律以及事故介质的分布特征进行总结;对在火灾爆炸事故调查中具有普遍代表性的事故表征物:爆炸抛射物、火灾爆炸容器、喷溅物和烟尘及烟熏痕迹的特征进行分析;从定量、半定量化的角度,对事故原因进行探讨,事故分析结果,对于从理论的角度分析事故原因、有效预防事故都具有重要的作用。     

Development of a new chemical process-industry accident database to assist in past accident analysis

Past accident analysis (PAA) is one of the most potent and oft-used exercises for gaining insights into the reasons why accidents occur in chemical process industry (CPI) and the damage they cause. PAA provides invaluable ‘wisdom of hindsight’ with which strategies to prevent accidents or cushion the impact of inevitable accidents can be developed.A number of databases maintain record of past accidents in CPI. The most comprehensive of the existing databases include Major Hazard Incident Data Service (MHIDAS), Major Accident Reporting System (MARS), and Failure and Accidents Technical Information Systems (FACTS). But each of these databases have some limitations. For example MHIDAS can be accessed only after paying a substantial fee. Moreover, as detailed in the paper, it is not infallible and has some inaccuracies. Other databases, besides having similar problems, are seldom confined to accidents in chemical process industries but also cover accidents from other domains such as nuclear power plants, construction industry, and natural disasters. This makes them difficult to use for PAA relating to CPI. Operational injuries not related to loss of containment, are also often included. Moreover, the detailing of events doesn’t follow a consistent pattern or classification; a good deal of relevant information is either missing or is misclassified.The present work is an attempt to develop a comprehensive open-source database to assist PAA. To this end, information on about 8000 accidents, available in different open-source clearing houses has been brought into a new database named by us PUPAD (Pondicherry University Process-industry Accident Database). Multiple and overlapping accident records have been carefully eliminated and a search engine has been developed for retrieval of the records on the basis of appropriate classification. PUPAD doesn’t aim to replace or substitute the well established databases such as MHIDAS and MARS but, rather, aims to compliment them.     

Development of a database for accidents and incidents in the Greek petrochemical industry

The present paper describes the development of a database that comprises all incidents from the Greek petrochemical industry for the period 1997–2003. This database includes industrial incidents, accidents, operational accidents and near misses from all petrochemical sites in Greece and Cyprus. The design of the database has been conceived in a user-friendly way with additional possibilities for its further use, such as: statistical analysis of the data, calculation of safety indicators, accident reports and human factors analysis. The database allows the various participating industries to compare the analysis of indicators in their own installations with the national average, as the database comprises data from the entire Greek petrochemical industry. Special care has been given to include data from near misses too.     

Developing safety indicators for preventing offshore oil and gas deepwater drilling blowouts

An important question with respect to the Macondo blowout is whether the accident is a symptom of systemic safety problems in the deepwater drilling industry. An answer to such a question is hard to obtain unless the risk level of the oil and gas (O&G) industry is monitored and evaluated over time. This article presents information and indicators from the Risk Level Project (RNNP) in the Norwegian O&G industry related to safety climate, barriers and undesired incidents, and discusses the relevance for deepwater drilling. The main focus of the major hazard indicators in RNNP is on production installations, whereas only a limited number of incident indicators and barrier indicators are related to mobile drilling units. The number of kicks is an important indicator for the whole drilling industry, because it is an incident with the potential to cause a blowout. Currently, the development and monitoring of safety indicators in the O&G industry seems to be limited to a short list of “accepted” indicators, but there is a need for more extensive monitoring and understanding. This article suggests areas of extensions of the indicators in RNNP for drilling based on experience from the Macondo blowout. The areas are related to schedule and cost, well planning, operational aspects, well incidents, operators’ well response, operational aspects and status of safety critical equipment. Indicators are suggested for some of the areas. For other areas, more research is needed to identify the indicators and their relevance and validity.     

Critical aspects for collision induced oil spill response and recovery system in ice conditions: A model-based analysis

The recovery effectiveness for oil spills in ice conditions depends on a complex system and has not been studied in depth, especially not from a system risk control perspective. This paper aims to identify the critical aspects in the oil spill system to enable effective oil spill recovery. First, a method is developed to identify critical elements in a Bayesian Network model, based on an uncertainty-based risk perspective. The method accounts for sensitivity and the strength of evidence, which are assessed for the different Bayesian Network model features. Then, a Bayesian Network model for the mechanical oil spill recovery system is developed for the Finnish oil spill response fleet, contextualized for representative collision accident scenarios. This model combines information about representative sea ice conditions, ship-ship collisions and their associated oil outflow, the oil dispersion and spreading in the ice conditions, and the oil spill response and recovery of the fleet. Finally, the critical factors are identified by applying the proposed method to the developed oil spill response system model. The identified most critical system factors relates collision aspect: Forcing Representative Scenario, Representative Accident Location, Impact Speed, Impact Location, Impact Angle and response aspect: Response Vessel Operability.     

Safety in fishing — learning from experience

This article critically examines the level of safety in some sections of the UK fishing industry not only by looking at the available statistics but also by examining actual recent case histories.In 1989 the UK Department of Transport established the Marine Accident Investigation Branch (MAIB). Case histories published by MAIB have been taken as the basis for the article in order to illustrate and draw lessons from incidents that occur in fishing.Fishing will always be a high risk profession but there are ways in which risks can be diminished. Many of the problems are due to vessels being built below the 12 m threshold at which the 1975 Safety Rules currently apply. Some of the vessels lack adequate reserve stability to withstand capsize in the dynamic situation and there are deficiences in design and safety equipment. The training programmes introduced by Seafish for Survival, Fire Fighting and First Aid are now mandatory for all new entrants and these have almost certainly resulted in the saving of lives. However, there needs to be a much greater awareness of accident prevention and the article makes a plea for this to be given more attention.Each case study is probably unique or there are some specific circumstances as to why the accident happened. Nevertheless, there are always underlying lessons to be learnt from every incident of this type, even if there is no loss of life or serious injury.     

Worker-fatigue contributing to workplace incidents in New Zealand Forestry

ProblemReports of incidents in dangerous work environments can be analysed to identify common hazards, in turn aiding in the prevention of future accidents. Whilst studies exist that do this, most focus on causes that involve physical risks. In this paper we propose an alternative approach, and illustrate causes of forestry incidents from the perspective of worker-failure and fatigue. Method This paper outlines the analysis of eight years’ worth of New Zealand forestry incident data, with a focus on the cause of, and time that, incidents occur. Results This has resulted in two main findings. First, 70% of incidents can be attributed, at least in part, to worker-failures. Second, 78% of worker-failure based causes show indications of fatigue. This indicates that a significant number of forestry incidents are caused by worker-fatigue. Finally, this dataset showed inconsistencies in data quality, similar to those that exist in other datasets. This did not affect our analysis. However, these types of errors have the potential to affect the data quality in the national reporting system. Impact on industry The results from this study will be used in a larger project on detecting fatigue in forestry workers for injury and incident prevention. It is also our hope that other researchers may find these results of interest for further fatigue prevention research in hazardous industries.